According to the Housing and Economic Recovery Act of 2008, beginning on January 1, 2012, Acquirers in the electronic payments industry were required to report credit card payments to the IRS.
In addition, Acquirers are also responsible for performing backup withholding on any merchants whose information (name and tax ID) does not match IRS records.
All merchants are encouraged to confirm that their merchant services provider has the most current, up to date and accurate TIN information on file. Merchants should consider submitting a copy of their W-9 form or a copy of the SS-4 form as part of the application process or upon any changes to their businesses legal structure that shows exactly how the merchant’s name is filed with the IRS therefore substantially reducing the possibility of a mismatch.
In January 2013, Vantage will facilitate the mailing of 1099-K documents to all its merchant clients. In late 2013, if the IRS reports non-matching records, those merchants will receive a backup withholding notice (a B-Notice). If a merchant does not respond to the B-Notice and request for W-9, their merchant account must be placed on backup withholding.